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DSGi moots Italian retreat

by Stuart Wilson, Tuesday 29 April 2008

European IT and consumer electronics retail giant DSGi has announced plans to close up to 40 of its Italian stores over the next two years. London-quoted DSGi, which owns a number of retail chains across Europe, has informed the staff concerned and is currently working with unions to review each store on a case-by-case basis.

DSGi operates a multi-channel approach, operating more than 1,300 retail and online stores across 28 countries with a workforce of close to 40,000. DSGi claims that more than 100 million customer shop either online or in its stores each year.

DSGi’s brand portfolio includes PC World, Currys and Dixons.co.uk in the UK and Ireland, Elkjop in the Nordic countries, UniEuro in Italy, Kotsovolos in Greece, Electro World in central Europe, Greece and Turkey, PC City in Spain, Italy and Sweden, and Pixmania.com across Europe.

DSGi named Mario Maiocchi as the new managing director if its Italian operations in January 2008. Maiocchi joined DSGi from Metro Group, where he had worked since 1998, most recently as Managing Director Metro Cash and Carry, Italy. Maiocchi took on overall responsibility for a workforce of over 3500 and a retail portfolio of 253 stores at DSGi.

Earlier this month on April 10th, DSGi issued a business update stating that the trading environment remained challenging, particularly in the UK, Italy and Spain. The statement read: “The UK and Ireland electricals business has seen good demand in response to promotions on flat panel televisions, laptops and large white goods, particularly over the Easter period. However demand outside of these promotions has been lower than expected, with a negative impact on margins. Overall sales in UK Computing remain disappointing, despite reasonable demand for laptops and games consoles. Sales of standalone non-hardware products were lower year on year, in line with the trends previously reported. ”

“The Nordics, Greece and Central European businesses all delivered satisfactory performances over the second half of our financial year. Trading in Spain remains difficult. The performance in Italy remains disappointing, not helped by the difficult economic environment. Our e-commerce businesses continue to grow strongly,” the statement continued.

John Browett, chief executive, commented earlier this month: "The trading environment since we last reported has remained challenging across our markets, particularly in the UK, Italy and Spain. Whilst like for like sales patterns are broadly in line with those we reported over the Christmas period, it is clear that customers have become increasingly promotion and deal driven, impacting gross margins."

“Going forward it is important that we increase our focus on delivering the value, choice and service that our customers demand, particularly in the prevailing difficult economic environment. I will present the first phase of the business review I have carried out since joining DSGi on 15th May 2008," Browett added.

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